The cause of this is the Polkit failure is reported back via snapd as a general unauthorized failure. GNOME Software then attempts to do a snap login which is the old method of gaining authorization.

There seem to be two solutions to this:

1. snapd should report the auth failure with an error code so that GNOME Software can tell this is a Polkit failure and not a login credentials failure. James said this change was unlikely to be done in time for artful.

2. GNOME Software could stop attempting to login on an auth failure. This would mean that the Ubuntu One dialog is never shown for snaps, which is probably appropriate as Polkit covers this case. It means we can't see private snaps from GNOME Software (since we never prompt for login), but this was always going to be the case after we switched to Polkit. To handle private snaps we will have to rethink the UI to support optional login support.

I think the most appropriate solution is 2 with a versioned dependency on snapd. We probably can't do this until snapd lands in the archive?